Commodity News

India’s Sugar Production Likely to Drop to 3-year Low Next Season

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India’s sugar production, which competes with Brazil as the world’s top producer is likely to fall to a 3-year low next season as dry weather in a few main growing areas of the western region has cut planting.

Managing director of the National Federation of Cooperative Sugar Factories Ltd. Mr. Prakash Naiknavare said production can shrink to less than 30 million tons in the year that starts on 1st October from an estimated 31.5 million tons this period.

According to Indian Sugar Mills Association (ISMA), India produced record 32.5 million tons in the year 2017 to 2018.

A fall in yield for a second year will potentially slash overseas shipments and support universal prices that dropped by 21 % in 2018, a 2nd straight year of losses, as thriving global production raised concerns about a supply surplus.

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Naiknavare said drought in some parts of Maharashtra has discouraged sowing and looking at the speed of planting, it seems that the area under sugarcane will plunge. He added that some parts of Karnataka, country’s third largest grower also suffered from drought.

Naiknavare also said sugar exports in India could total 2.5 million - 3 million tons in the year, which will end on 30th September, compared with a target of 5 million tons. Moreover, the export window will shut before the new crop in Brazil reaches market in March to April. He said a hike in the minimum sale price of sugar will also slow down the exports.



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